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September 23,
2017
2 VALUE CHAIN
Porters definition includes all activities to design, produce, market, deliver,
and support the product/service.
A value chain is a set of activities that a firm operating in a specific
industry performs in order to deliver a valuable product or service for
the market.
Way of organizing the activities of a business so that each activity adds
value (value added activity) or productivity to the total operation of the
business.

September 23,
2017
3 TYPES OF VALUE CHAIN

Value Chain is Categorized Based On The Type Of

Organizations.

Manufacturing based.
Service based.
Both Manufacturing And Service Based.

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2017
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VALUE CHAIN ANALYSIS

Value Chain Analysis is a useful tool for working out how

you can create the greatest possible value for your
customers. In business, we're paid to take raw inputs, and
to "add value" to them by turning them into something of
worth to other people.

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2017
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2017
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Introduced by Michael E. Porter in his influential book Competitive Advantage in

1985.
Can be used by companies to examine all of their activities in the process of converting
inputs to outputs.
How value chain activities are carried out, determines costs and affects profits.
The value that's created and captured by a company is the profit margin (Value Created
and Captured Cost of Creating that Value = Margin). September 23,
2017
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Primary 1 Inbound Logistics.

Activities 2 Operations
Involve the purchase of
materials, the 3 Outbound Logistics
processing of materials
into products, and
delivery of products to
4 Marketing and Sales
customers.

5 Services
September 23,
2017
 Firms Infrastructure : These are a company's support systems,
and the functions that allow it to maintain daily operations.
Accounting, legal, administrative, and general management are
8 examples of necessary infrastructure that businesses can use to
their advantage.

Support Human Resource Management : This is how will a company

Activities
recruits, hires, trains, motivates, rewards, and retains its workers.
People are a significant source of value, so businesses can create a
clear advantage with good HR practices

Support primary
activities and can play a Technology Development : These activities relate to managing
role in each primary and processing information, as well as protecting a company's
knowledge base. Minimizing information technology costs, staying
activity. current with technological advances, and maintaining technical
It may also support each excellence are sources of value creation.

other within support

activities. Procurement : This is what the company does to get the resources
it needs to operate. This includes finding vendors and negotiating
best prices.
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2017
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The value chain is a very flexible strategy tool for looking at your business.

Used to analyze and create competitive advantages on both cost and difference.

Understand the organisation issues involved with the potential of making customer
value commitments and potentials

Adapted for any type of business (manufacturing, retail or service, big or small).

The deeper understanding of your strengths and weaknesses to be included in

your SOWT analysis ( you vs competitors)

Well known and has been a support plan for teaching in business schools (last 20 to 25
yrs.) September 23,
2017
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It has to be adapted to a particular business situation and that can be a

disadvantage since, to get the best from the value chain.

Many people are familiar with the value chain but few are experts in
its use.

The scale and scope of a value chain analysis can be threatening.(full

value chain is difficult)(your vs competitors)
September 23,
2017
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TATA MOTORS
(A Manufacturing Based Company)

September 23,
2017
 Value Chain & Value System of TATA Motors
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Transporters, Convoy Dealer Network, Marketing
Drivers Association Research Firms, Vehicle
Financing

SAP , VCM

Inbound Operations Outbound

Marketing Service
Logistics Logistics

SAP , CRM - DMS

Suppliers , Contractors Regional Warehouses,

Dealer Workshops,
Distributors, TASS

Strategic Alliances September 23,

2017
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Inbound Logistics
Long term contract with service providers transporters and agents.
Personnel at regional offices for over seeing the smooth transit of goods.
Transparency and monitoring through deployment of IT all transactions
through SAP.
DTL (daily transport logistics) supplies for critical high value items.
Efficient storage facilities easy storage and retrieval.

September 23,
2017
14 OPERATIONS
Capital Equipment Manufacturing division tooling development
capabilities of global standard.
Apprentice Trainee Course ensuring stable source of skilled
manpower.
TPM(total productive management) team continuous drive to improve
efficiencies.
Automated manufacturing processes.
Distributed manufacturing Assembly units at South Africa, Thailand,
Bangladesh, Brazil etc.
Maintenance technical capability.
Capacity Utilization Mercedes Benz cars make use of Tata Motors
paint shop facilities.
September 23, 2017
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OUTBOUND LOGISTICS
Stockyards, all across the country.

Long term contracts with transporters higher volume of business to transporters

ensures competitive price.

Regional Sales Office and Vehicle Dispatch Section linked through SAP.

Efficient security system for prevention of any kind of pilferage.

September 23,
2017
 16 Marketing & Sales
Structured approach to understanding the requirements of individual customers
QFDs conducted at regular intervals.
Clear identification of product requirements, leading to development of
innovative products Tata 207 DI, Tata Ace.
Pan India presence and global footprint.
Various teams for addressing the requirements of institutional customers
Defense, State Transport Units
Quick assessment of the changing market dynamics and consumer preferences
Tata 407 LCV
Large network of dealers use of technology (CRM-DMS). September 23,
2017
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Service(TASS)
Easy availability of spare parts.
Efficient collection of data from field and
communication to the respective plants.
Pan India presence, as well as global presence.
Large network of workshops Dealer workshops and
TASS.
Training facilities for dealer end and TASS personnel.
September 23,
2017
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SUPPORT
ACTIVITIES

September 23,
2017
19 Procurement
E procurement initiative.
Global Sourcing Team China like tires, power steering units etc.,
Steel procured from Belarus.
Long term relationships with a stable and loyal pool of suppliers.
Technology driven procurement SAP.
Group resources Tata Steel and Tata International .
Localized supplier base at mfg. locations low inventory levels.

September 23,
2017
20 Technology Development
Approximately 2% of the annual profits of the company invested in
(R&D).
Knowledge portal helps employees keep up-to-date with the latest
technologies.
Extensive prototype building and testing facilities. Strategic
partnerships MDI (France), Fiat etc.
Formal benchmarking process.
Technology Day organized across all plant locations.

September 23,
2017
21 Human Resource

Vast pool of technically competent engineers and

managers.
Focus on development of technical capabilities
Technical Training Centers, Alliance with technical
Institutes.
Focus on development of managerial skills MTCs ,
TMTC
Career improvement schemes FTSS . September 23,
2017
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Firm Infrastructure
Multi Location facilities.
Strong leadership under the support of Tata Sons.
Best in class prototype building facilities.
Technology SAP.
Large product portfolio.
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2017
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September 23,
2017